The rupee recovered from its 16-month low to close higher at 68.04 per US dollar today.
The rupee traded in a tight range of 68.08 to 67.93 per US dollar today.
On Monday, the rupee had lost 12 paise to close at a fresh 16-month low of 68.12 against the US currency.
Selling of US dollars by exporters and banks, weakness in the dollar against other currencies overseas supported the rupee.
Gains in the domestic stock markets also lifted the rupee.
The Sensex today edged higher to snap a 5-session losing streak.The dollar today fell off its five-month high against a basket of major currencies.
The dollar index, which measures the US currency against the main world currencies, was down 0.3 per cent at 93.40 from Monday's five-month top of 94.058."With dollar index receding and intervention from the central bank, in the near term, we see US Dollar/rupee to be range bound between 67.90 and 68.25," said Salil Datar, CEO Executive Director of Essel Finance VKC Forex."A relief rally was seen in most majors and emerging market currencies against the US Dollar.
US yields too have softened a tad," said forex advisory firm IFA Global in a note.The 68.15 level is offering strong resistance to the USD/rupee pair, which could trade in the range of 67.85-68.15 in the near term, it added.After strong gains against the US dollar last year, the rupee has slipped nearly 6 per cent against the US currency so far this year.
Rising global crude prices and concerns over current account deficit and fiscal deficit is hurting the rupee.(With Agency Inputs)